Peter Costello (Higgins, Liberal Party, Treasurer) Share this | Hansard source

I thank the honourable member for his question and indicate that I have had lots of representations on this matter. The member for Gwydir has been very, very active as a local member in relation to this, and I pay tribute to him for all of the wonderful work he does on behalf of people up near the Namoi.

Whether a sum is characterised as a capital sum or income depends on the application of case law. If it is characterised as a capital sum under the authorities, then you are eligible for this government’s discount rate on a capital gain. If it is characterised as a capital sum, it can be set off against capital losses. Whether that is advantageous or not will depend on a particular person’s taxation arrangements. If it is income—that is, if it is genuinely income—then it follows that it will be assessed as income under the Income Tax Assessment Act.

We are looking at this very carefully. This is a matter for the application of the law and the Commissioner of Taxation. The Commissioner of Taxation will make his decision. If there is anything arising out of that that warrants further action, then the government will carefully consider that and we will let the public know.

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